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William R. Emmons

Assistant Vice President and EconomistFederal Reserve Bank of St. Louis

Bill Emmons is an assistant vice president and economist at the Federal Reserve Bank of St. Louis and the senior economic adviser for the Bank’s Center for Household Financial Stability. Read more about the author and his research.

Family wealth generally increases with education. But new research shows that race and ethnicity can greatly affect the relative payoff. There’s a gap—sometimes wide—between the wealth of Hispanics and African-Americans and the wealth of whites and Asians at every education level, from those with only a high school diploma to those with an advanced degree.

The buildup of mortgage debt before the crisis and the subsequent deleveraging have had profoundly different effects on different age groups. Younger families generally experienced the most volatility, while older families emerged with the largest net increase in mortgage debt.

The financial crisis and ensuing recession took a toll on just about everybody’s household wealth. Not surprisingly, the pain wasn’t evenly distributed. Those groups that are usually the most vulnerable in our society—young and middle-aged minority households—suffered the most, percentage-wise.

Consumer spending has long been the engine of U.S. and global economic growth. But five trends in 2011 suggest that such spending can no longer be counted on. Finding a replacement is going to be difficult, at best.

Before the housing boom and bust, changes in local house values appeared to be a local phenomenon. Now, however, the District’s house-price changes are mirroring national patterns. Therefore, downward trends in other parts of the country may continue to negatively affect prices in the District.

At least early in the financial crisis, the high rate of foreclosures seemed to be due more to households' overreaching than to predatory lending. A disproportionate number of those being foreclosed on were well-educated, well-off and relatively young people.

As painful as it may be, letting the housing and mortgage markets sort out these problems on their own would be best for the economy in the long run. Large-scale government interventions are not necessarily the best policy responses, although those made truly needy by this crisis need to be helped.

Surveys and statistics show that many U.S. households lack the basic skills of financial literacy. Being aware of some common personal finance myths may help consumers make better-informed financial decisions.

Lower interest rates can make mortgage refinancing a good idea, but borrowers need to pay attention to more than just the monthly payment. Cash-out refinancing is especially tricky because it entails taking on a larger mortgage. This can lead to a greater repayment burden in the future.

Initially, Basel II will affect only the world's largest banking organizations. Eventually, the impact will trickle down to others. Some regional and community bankers, for example, might find it more difficult to survive. Consumers, on the other hand, could wind up with lower rates on home mortgages.

These government-sponsored enterprises continue to make headlines because of their explosive growth and resulting heavyweight status within the nation's financial system. Critics fear what would happen if one of these giants were to fail—or even stumble. Supporters say that the risks are overblown and that the benefits to homeowners are underappreciated.